Jobless plan not the way to go: experts

Senior writer

Tony Abbott also announced a relocation allowance of $6000 for long-term unemployed job seekers who move to a regional area for work. Photo: Alex Ellinghausen

An Abbott government will try to cut long-term unemployment by paying young people who have been out of work for a year or more up to $15,500 if they get and keep a job. But experts say the money would be better spent helping businesses to take on long-term job seekers.

The Coalition will give people aged 18 to 30 who have been unemployed for 12 months or more a $2500 ''bonus'' if they get a job and remain off welfare for a year. They will be paid a further $4000 if they stay in work for 24 months.

Opposition Leader Tony Abbott also announced a relocation allowance of $6000 for long-term unemployed job seekers who move to a regional area for work. Those with a family with dependent children will get a further $3000.

Mr Abbott said this was a ''sensible investment'' that aimed to ''produce a stronger and more productive economy for a stronger and more cohesive society''.

Advertisement

The number of long-term unemployed has grown from about 300,000 to about 500,000 since the global financial crisis.

Labour market experts were sceptical about the effectiveness of the proposed bonuses because they did nothing to help companies employ long-term jobless.

''If it was that easy it would have been done a long time ago,'' Sydney University Business School's Professor John Buchanan said. He said businesses that could employ those out of work for a long period needed subsidies.

''We've got to get them on side and well supported,'' he said.

Melbourne Institute economist Professor Mark Wooden said it was pointless to offer incentives to the unemployed if there was no demand for their labour.

''If employers don't want to employ these job seekers, you can offer as many incentives as you like but it's not going to make any difference,'' he said.

Professor Wooden was also sceptical that ''a couple of thousand dollars would make much difference'' to long-term job seekers.

Peter Davidson, the senior policy officer at the Australian Council for Social Services said the challenge was to create job opportunities for the long-term unemployed.

''The problem for young long-term job seekers is that they are not getting offers rather than them knocking offers back,'' he said.

Incentives to encourage and assist employers to take on long-term job seekers ''matter more in this case than incentives for job seekers themselves''.

Professor Buchanan also cast doubt on the effectiveness of the proposed relocation assistance.

''If you can't get a job why would you leave your social support networks?'' he asked.